The notes to the Helping Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year):

Helping Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31.

Requirements

1. Answer the following questions about Helping Charities long-term liabilities:

a. What is the maturity value of the 7% bonds?

b. What are Helping Charities annual cash interest payments on the 7% bonds? c. What is the carrying amount of the 7% bonds at December 31, year 1?

2. PrepareanamortizationtablethroughDecember31,Year4,forthe7%bonds.Themarket interest rate on the bonds was 8%. (Round all amounts to the nearest dollar.) How much is Helping Charities interest expense on the 7% bonds for the year ended December 31, Year 4?

3. Show how Helping Charities would report the 7% bonds payable and the 6% notes payable at December 31, Year 4

Note 6 . Indebtedness Bonds payable, 7% due in Year 7 $3,500,000 Less: Discount Notes payable, 6%, payable in amounts of $55,000 (162,365)$3,337,635 annual installments starting in Year 5 .... 330,000